6.1 An introduction to effective judicial protection

266. Part I demonstrates that Union law confers rights and imposes obligations upon private parties, and that in many cases it does not provide for concrete remedies in case such rights are violated. In Von Colson and Kamann and Harz – two of the first cases on civil remedies – the Court of Justice held that “it is impossible to establish real equality of opportunity without an appropriate system of sanctions” and that victims of discrimination “have rights of which they may avail themselves before the courts”.1 Since these considerations of the Court are of a general nature, it is assumed that these requirements in principle apply to each sanction or remedy for an infringement of any right that Union law confers upon a private party.2 Later, the Court held that the right to effective judicial protection, including the right to an effective remedy, is “a general principle of EU law stemming from the constitutional traditions common to the Member States”3 and “inherent in the existence of the rule of law”4. Eventually, the right to effective judicial protection was codified in Article 47 Charter, which reads:

267. Article 47 Charter is partially based on Articles 6 and 13 ECHR.5 These provisions are secured by Article 47 Charter, which has a broader scope of application as it applies to all rights and freedoms guaranteed by Union law, and not only to civil rights and obligations and criminal charges.6Everyone who derives rights from Union law has the right to effective judicial protection of those rights.7 The right to effective judicial protection is two-dimensional in the sense that it requires 1) that the applicable procedural rules do not make effective judicial protection excessively difficult or virtually impossible, and 2) that there are actual real and effective remedies for infringements of Union law.8 As regards the latter, Member States can either adopt specific remedies for infringements of Union law, or apply existing remedies in a way that is in conformity with Union law. The failure to provide for effective procedures and remedies is liable to undermine the principle of effective judicial protection.9 Building on the civil remedies and concrete outcomes of the cases discussed in Part I, Part II focuses on those remedies and concrete outcomes rather than on the procedural dimension of the right to effective judicial protection.

268. As regards the obligation upon Member States, including national courts, to provide for effective judicial protection of Union law, it is recalled that in most cases neither Union legislation nor case law of the Court of Justice stipulates the specific remedy for an infringement of Union law.10 As a result, remedies for infringements of Union law have to be sought in the law of the Member States, which on the basis of the principle of sincere cooperation and Article 19 TEU “shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law”.11 In relation to an infringement of the free movement of workers by a private party, the Court of Justice for example held in Raccanelli that “it is for the referring court to assess, in light of the national legislation applicable in relation to non-contractual liability, the nature of the compensation which the applicant in the main proceedings would be entitled to claim”.12 Yet, in Dekker the Court clarified that liabiliy for infringements of Union law cannot be made dependent upon a fault-requirement, and that the grounds for exemption and grounds of justification in national law do not apply – at least, not to infringements of the right to non-discrimination.13

269. Further, when Union law does regulate remedies for infringements of Union rights, Member States are still allowed to adopt additional remedies.14 Member States are in principle free to adopt specific remedies for infringements of – specific rules of – Union law. However, as demonstrated in Part I, it is also possible that the existent repertoire of civil remedies applies to particular infringements of Union law. Any sanction or combination of sanctions that a Member State within its margin of discretion chooses to remedy violations of Union law, must comply with the principles of effectiveness and equivalence and with the standards of effective judicial protection laid down by the Court.15 The fact that remedies are in principle based on national law and subsequently are, if necessary, moulded or reshaped in a way that complies with the standards for effective judicial protection on the basis of Union law, results in ‘hybrid remedies’.16 A hybrid remedy for an infringement of Union law requires three steps to be taken. Firstly, the appropriate national remedy must be found for a particular infringement of Union law. Secondly, the national remedy must be measured: it must be assessed whether the remedy respects the principles of effectiveness and equivalence, and whether it complies with the requirements of the right to an effective remedy (discussed below). Thirdly, insofar as needed the national remedy must be adjusted or upgraded17 to the requirements for effective judicial protection as provided in Union law – this last step is what eventually leads to the hybrid nature of a remedy.18

270. In Von Colson and Kamann and in Harz the Court held that

In subsequent cases, like Marshall II, Draehmpaehl and Paquay the Court confirmed that the right to effective judicial protection includes the right to a remedy that is effective, proportionate and dissuasive.20 By formulating these elements of effective judicial protection, the Court of Justice has infused a common standard for effective judicial protection, in relation to which the Union and the Member States have shared responsibility.21

271. Following in the footsteps of the Court of Justice, the European legislature has, in a number of directives, adopted the obligation that “Member States shall lay down the rules on sanctions applicable to infringements of the national provisions adopted pursuant to [the] directive and shall take all measures necessary to ensure that they are applied. The sanctions, which may comprise the payment of compensation to the victim, must be effective, proportionate and dissuasive”.22 Nevertheless, it should be noted that the requirement that a remedy must have a deterrent effect is toned down in the sense that in horizontal proceedings Union law does not require that Member States impose punitive damages that go beyond full compensation for the loss and damage actually sustained: in that context compensatory damages suffice.23 Even, in the realm of antitrust infringements, Directive 2014/104 prohibits overcompensation and punitive damages.24 This prohibition may be explained by the well-developed fine-system in European competition law. The infringing company is likely to be sanctioned with a fine that already has a punitive character. Therefore, it may be excessive to add the possibility of being confronted with punitive damages in horizontal proceedings. It is uncertain whether the prohibition of punitive damages will spread to fields of Union law that are not subject to regulatory enforcement and sanctions in the way that competition law and unfair trade practices are. In general, the requirement that sanctions are dissuasive is more relevant in relation to administrative measures such as fines, which must be high enough to have a deterrent effect.25 In relation to remedies in private law the focus lies – or should lie26 – on the effectiveness and the proportionality of the remedies. Should the civil remedies not be sufficiently deterrent, a Member State may be encouraged to adopt additional administrative or criminal sanctions for the same infringement.27

272. Whether a sanction or a remedy is effective, proportionate and deterrent has to be determined on a case by case basis, in light of the specific circumstances at hand.28 The remedy should reflect a fair balance between each of the separate elements. For example, if a private party has to pay an exceptionally high amount of damages that exceeds the compensation of the damages actually suffered, that remedy may be effective and dissuasive, but it is likely to be at odds with the proportionality principle.29 Hence, the requirements necessarily entail that the particular circumstances of each breach of Union law are taken into account.30 In the same vein, in 2005 the European Commission published a thematic report on remedies and sanctions in non-discrimination law31 followed by a “handbook” in 2011 on how to present a discrimination claim.32 The European Commission notes that “the meaning of effective, proportionate and deterrent remedies must be determined in each specific case in light of the individual circumstances”.33 In my view, there are no reasons not to apply the requirements of the Court and the European Commission mutatis mutandis to other remedies of infringements of Union law in the context of a horizontal legal relationship, also outside the scope of non-discrimination.

273. National courts are obliged to interpret statutory remedies available at the national level in conformity with Union law, including the right to effective judicial protection.34 In Egenberger the Court of Justice held that insofar as consistent interpretation is impossible and national legislation is incompatible with the right to effective judicial protection as laid down in Article 47 Charter, the national court must set aside that legislation, also in proceedings between private parties.35 Article 47 Charter complies with the AMS-criterion, meaning that this right is sufficient in itself and does not need to be made more specific by provisions of Union law or national law to confer upon private parties a right upon which they may rely as such in cases governed by Union law.36

274. To recapitulate, national courts must provide for effective judicial protection of rights that Union law confers upon private parties, by ticking off the following steps – insofar as applicable to the case in question:

275. In the context of the study at hand, the right to an effective remedy comes into play when a private party infringes or restricts a right that Union law confers upon another private party. Typically this occurs in cases in which a private party infringed directly horizontally effective Union law – e.g. Angonese and Laval, Courage/Crehan – or when a private party infringed national legislation that correctly implemented a directive – e.g. adopting unfair terms in consumer contracts or carrying out unfair commercial practices. Yet, in cases like Mangold, Kücükdeveci, Dansk Industri, CIA Security and Unilever Italia it turned out that private parties had acted in conflict with Union law by relying on national legislation that was incompatible with rules of Union law. In those cases the national courts were obliged to, in the horizontal proceedings, set aside the legislation that was incompatible with Union law. Article 47(1) Charter states that “everyone whose rights and freedoms guaranteed by the law of the Union are violated has the right to an effective remedy” and does not specify the nature of the violation. It follows that this right applies also to those private parties whose rights were infringed as a result of another private party relying on national legislation that was incompatible with Union law and that has to be set aside.

276. As demonstrated in Part I, the legal consequences of the disapplication of a national rule in horizontal proceedings have to be sought in national law. In Sapod Audic the Court of Justice stated:

Although the Court’s consideration does not explicitly refer to the right to effective judicial protection as discussed above, it surely reflects its elements, especially the fact that the sanction must be effective and that it must be proportionate to the defect found. Sapod Audic concerned a procedural compatibility review.41 However, in my view this consideration applies also to the disapplication of a national provision following from a substantive compatibility review.

277. Having set out the basic foundations of the right to effective judicial protection, the following sections concentrate primarily on civil remedies and the requirement that remedies must be proportionate in view of the remedy chosen and the seriousness or gravity of the infringement at hand. The effectiveness and dissuasiveness of civil remedies are discussed only where relevant.